"President Trump made this decision to maximize the chances of successfully negotiating a deal between Israel and the Palestinians, fulfilling his solemn obligation to defend America's national security interests," the White House statement said. "But, as he has repeatedly stated his intention to move the embassy, the question is not if that move happens, but only when."

One senior administration official told CNN: "As you have seen the President say, in the region and here in Washington, he thinks this is a hopeful moment for peace and he has committed his administration to try to facilitate progress towards peace and for that reason, he signed the waiver."

Trump promised throughout the 2016 campaign that he would move the US embassy from to Jerusalem, an action the Israeli government has long advocated.

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"We will move the American embassy to the eternal capital of the Jewish people, Jerusalem," he said in a March 2016 speech to the American Israel Public Affairs Committee.

But after Trump entered the White House, he and his aides began to realize the fragile situation that surrounds any possible peace talks in the Middle East.

"It is not a permanent thing," the official added. "For him, it is a matter of when not if the US embassy is moved to Jerusalem."

The official added that this decision was made to "keep the peace process going."

Signing the waiver this week forestalls any move for another six months. Every US president has signed such a waiver twice a year after a law was passed in 1995 mandating the relocation of the embassy to Jerusalem.

One official said that "all parties" -- meaning both Israeli and Palestinian leaders -- have been notified that the embassy would be staying in Tel Aviv.

Netanyahu, in a statement, said while Israel was "disappointed" in the decision, they "appreciate today's expression of President Trump's friendship to Israel and his commitment to moving the embassy in the future."

"Israel's consistent position is that the American embassy, like the embassies of all countries with whom we have diplomatic relations, should be in Jerusalem, our eternal capital," the Prime Minister said.

Ambassador Dr. Husam Zomlot, the Palestinian representative to the United States, said the Trump policy "gives peace a chance."

"We are ready to to start the consultation process with the US administration," Zomlot said. "We are serious and genuine about achieving a just and lasting peace."

The senior administration official also defended the fact that Trump not moving the embassy was breaking a key campaign promise.

"The campaign promise is that the United States is going to take this action and that it is a question of when and not if," the official said.